Interim / Quarterly Report • Aug 28, 2009
Interim / Quarterly Report
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Net Insight delivers the world's most efficient and scalable optical transport solution for Broadcast and Media, Digital Terrestrial TV/Mobile TV and IPTV/CATV networks.
Net Insight products truly deliver 100 percent Quality of Service with three times improvement in utilization of bandwidth for a converged transport infrastructure. Net Insight's Nimbra™ platform is the industry solution for video, voice and data, reducing operational costs by 50 percent and enhancing competitiveness in delivery of existing and new media services.
World class customers run mission critical media services over Net Insight products for more than 100 million people in more than 35 countries. Net Insight is quoted on the Stockholm Stock Exchange.
For more information, visit www.netinsight.net
Net Insight AB (publ), Corporate Reg. No. 556533-4397
Over the six-month period we report earnings and profitability that are in line with our plans despite the global market downturn, which has affected our sales mainly in North America and Asia Pacific. Sales declined compared to the same period last year but improved margins and operating expenses according to plan generated healthy earnings and a continued strong financial position.
The underlying market demand for high quality media transport solutions is strong. We also see that many larger network rollout projects are being planned in our segments of the market around the world but the decision processes are currently somewhat slower causing delays.
During the second quarter we have continued to win new customers and our existing customers continue to expand and upgrade the installed base. The EMEA region has developed strongly during the quarter partially offsetting the weak quarter in APAC and North America. Our strong relationship with existing customers is a fundamental driver and enabled us to win a new customer in Denmark in close cooperation with BSD, one of our longstanding customers. We also established an important footprint in southern Europe when a large broadband and multimedia services provider selected Net Insight. As this new customer is planning further expansion we also see further business opportunities.
The Nimbra platform has proven to be the best solution for demanding contribution networks for live coverage in many countries around the world and this was once again confirmed when our solution was selected for live sport transmissions of a European football league.
We have continued to increase our investment in sales and customer support functions as part of our strategy to expand into new geographical markets. In the Middle East another step was taken when Net Insight was awarded an order for a significant TV production and contribution network in the region.
Our sales in APAC have decreased compared to the same period last year. Despite uncertain market conditions, we have won new customers during the period and we see increasing opportunities for our products in Asia. According to plan, our network of business partners and resellers has been extended and we are now pursuing opportunities in most major markets in the region.
In North America we have a strong position among broadcasters and media network operators and our customers continue to upgrade and invest in their Nimbra networks. During the second quarter, another tier one telecom operator bought Net Insight equipment. This order validates the need for flexible, quality-protecting transport solutions among service providers in the U.S. and our continued traction in this market. Our potential in North America remains significant but the second quarter was weak.
Our Time Transfer function (for GPS-independent synchronization of Single Frequency Networks) is an important market differentiator. We also introduced new capabilities in the Nimbra platform during the quarter, that are now in operation in customer networks. One new product is the IP Trunk, which makes it possible for a network owner to use Nimbra nodes to transport signals over a combination of optical links and IP/Ethernet links. Normally the IP/Ethernet links and the optical links are handled by different products and the Nimbra solution has a unique advantage in being able to use both kind of links at the same time.
Net Insight is well positioned for the future with a solid customer base, strong offering and healthy financial position.
Continous expansions were made by existing customers to their Nimbra based media networks. Swedish media operator Teracom ordered additional Nimbra equipment for an expansion to interconnect its media contribution networks in major Scandinavian cities. A large European media network operator runs a satellite and fiber network interconnecting multiple sites in Europe, Asia and the United States. The operator continued to expand its network with additional Nimbra nodes to efficiently transport media traffic for a European TV network. A large North American sports broadcaster incorporated additional Nimbra 680 nodes into its high-traffic production and distribution networks for the delivery of sports content. The expansion enables the broadcaster to accommodate explosive demand from subscribers for access to high-definition, global sports content.
Net Insight also continued to win new customers for delivery of broadcast and media transport networks. In Denmark, Net Insight received an order from DR (Danmarks Radio) for a contribution network. The Nimbra platform will be used to link eight different sites in Denmark for high quality transport of video and Ethernet services. In the long term DR will also use the platform to integrate all the audio connections for radio. The order was received in cooperation with Broadcast Service Danmark (BSD), who is operating the Digital Terrestrial TV distribution network in Denmark based on the Nimbra platform. A large broadband and multimedia services provider in southern Europe placed an order for a contribution network. Net Insight's Nimbra platform will be a strategic component of a contribution network supplied by the service provider (IPTV, telephony and data) to distribute multimedia services. The order was won in cooperation with a new project partner, Nokia Siemens Networks. A global tier one telecom operator selected Net Insight for a U.S. multi-service backhaul network. The operator deployed Nimbra switches to provide standard definition (SD) and high definition (HD) video transport as well as IT data services on the same platform between Los Angeles and New York. In Asia, a media network operator ordered Nimbra equipment for a TV distribution network.
The Nimbra platform has proven to be the top choice for demanding contribution networks responsible for transporting live sports footage from many professional sports venues across the globe including the U.S. and Europe as well as major events such as the 2008 Beijing Olympics. In June, the solution continued to prove its efficiency when a European media operator deployed a contribution network for live sport transmissions of a European football league. The network will carry SD feeds from multiple venues to a central production facility.
Net Insight received an order for a significant TV production and contribution network in the Middle East. The order value exceeded MSEK 10.
Net Insight continues to develop the partner network to further support sales growth and provide local support to customers.
In Asia, Net Insight increased its footprint by partnering with HBE and Mediatech. Horizon Broadcast Electronics (HBE) will be representing Net Insight in the growing Indian market and Mediatech is a new partner in Hong Kong.
In April, Net Insight participated in the NABShow2009 (National Association of Broadcasters) held in Las Vegas showcasing all Nimbra products and introducing new Nimbra functionality. At CommunicAsia in Singapore, Net Insight exhibited the Nimbra product range and Net Insight's Australian partner Techtel, exhibited Nimbra equipment at the SMPTE conference in Sydney. The Korean partner SanAm participated at the KOBA 2009 (Korea Broadcast) exhibition. Net Insight also participated at the Asia Future TV conference in Shanghai with the presentation "Experiences of Transport Solutions for TV Distribution Networks - A Global Perspective".
At the NAB exhibition in April, the Nimbra product portfolio was supplemented with additional switching and transport functionality for enhanced handling of IP/Ethernet traffic.
The 3 x IP/Ethernet Trunk Module for the Nimbra One and Nimbra 300 series enhances multi-service transport over any network architecture. With the new module, operators now have the option to create next generation IP media networks over existing IP, SDH/SONET, WDM or fiber.
The new Ethernet Switching Feature for the Nimbra 600 series 8 x Gigabit Ethernet Access Module delivers an unprecedented level of flexibility that allows customers to transport any service to any network location and form virtual networks for any application, such as QoS multicast transport of IPTV/CATV traffic, distributed office LAN applications, file transfers or live broadcast video, and can be combined with native video/audio/telecom services.
One of the world's largest sports broadcasters has relied on Net Insight's Nimbra platform for several years and continued to expand its sports distribution network in July.
In 2007, a Chinese broadcaster deployed Net Insight's Nimbra platform for a media contribution network between Beijing, Washington and London to transport video and Ethernet traffic. This network is now being expanded with additional international links to cater for traffic growth. Net Insight received the order in cooperation with the business partner CSS, a renowned system integrator in the broadcast and telecommunications industry in China.
A European media network operator is further extending its Nimbra based international media network across Eastern Europe.
In August, Thomas Bergström was appointed new CFO of Net Insight. Thomas has 14 years of relevant experience from senior financial positions mainly within the Ericsson group in Sweden and Australia. Before joining Net Insight he was CFO at Aastra Telecom Sweden.
In the previous interim report it was said that the Board is pleased with the progress during the first quarter and remains confident that the positive development will continue, with quarterly fluctuations.
Despite lower revenues in the second quarter 2009 compared with the same quarter 2008, the Board foresees positive developments, with quarterly fluctuations. As of the end of this year, the Board will cease to give quarterly outlooks.
Net sales for the six months period amounted to SEK 123.1 million (137.9). Positive currency effects of SEK 1.3 million (-0.8) have impacted net sales. Hardware revenue decreased by 10% in the period mainly related to lower volumes in North America and APAC. Software licenses declined 9% mainly due to lower volumes in North America. Support and service revenue grew by 7% related to an increase of maintenance agreements in the EMEA region.
The EMEA region accounted for SEK 97.5 million (64.4) of total sales. The North America region recorded a decline in sales to SEK 21.5 million (39.7). APAC region recorded a sales drop to SEK 4.1 million (33.9). The deviation is mainly constituted of a large order from Korea Telecom last year. Sales by segment were distributed on Broadcast & Media Networks by 67% (76), Digital Terrestrial TV & Mobile-TV Networks 29% (23) and IPTV/CATV 4% (1%).
Gross margin continued to develop strongly, which is explained by a stable price development despite the fierce competition and tough market environment in combination with a favorable product mix.
Operating expenses for the six months period amounted to SEK 73.7 million (82.2). The increase in marketing expenses is mainly explained by recruitments to sales, pre-sales and customer support. Effective from 1 January 2009, the depreciation period for capitalized development expenditures was amended from three years to five years based on a reassessment concerning the expected useful life of the products. The extension to five years has affected the results positively by SEK 12.8 million in the six months period compared to the depreciation period of three years. Capitalization of development expenditures totaled SEK 26.4 million (22.3). Depreciation of capitalized development expenditures totaled SEK 10.7 million (22.7).
Operating earnings for the six months period amounted to SEK 21.3 million (20.1). Last year's operating earnings was affected by other operating revenue of SEK 5.4 million for exercise of options under the employee option programs.
The financial net amounted to SEK –0.2 million (1.9). The negative financial net is explained by negative currency translation on Euro and US Dollar balances at the end of the reporting period in combination with lower interest rates on short term investments.
Net income before tax amounted to SEK 21.1 million (22.0), which corresponds to a profit margin at 17.2% (16,0).
Net income after tax amounted to SEK 15.1 million (22.0). This year's net income is charged with tax as a result of the activated deferred tax asset in the 2008 year-end closing. The tax expense amounted to SEK 6.0 million (0). This tax expense has no cash flow effect.
Net profit margin was 12.3 % (16.0). Adjusted for tax expenses, the net profit margin was 17.2 % (16.0).
Net sales for the second quarter decreased by 14% to SEK 62.6 million (73.2). The Swedish krona strengthened against USD and EUR in the quarter, which resulted in a negative currency effect of SEK -2.2 million (0.4). The second quarter last year included the leasing deal with Beijing Olympic Broadcasting, which explains the sales gap together with the negative currency effect.
The EMEA region accounted for SEK 51.1 million (36.8), North America SEK 8.7 million (25.9), and Asia SEK 2.8 million (10.5) respectively. The Broadcast & Media Networks segment represented 80% (82%), Digital Terrestrial TV & Mobile-TV Networks 14% (17%) and IPTV/CATV 6% (1%).
| Q2 | Q2 | Q3 | Q4 | Q1 Q308-Q209 | Full year | ||
|---|---|---|---|---|---|---|---|
| Net sales per region (MSEK) | 2009 | 2008 | 2008 | 2008 | 2009 | 12 months | 2008 |
| EMEA | 51.1 | 36.8 | 32.3 | 40.0 | 46.5 | 169.9 | 136.5 |
| North America | 8.7 | 25.9 | 15.2 | 24.9 | 12.7 | 61.5 | 80.1 |
| APAC | 2.8 | 10.5 | 18.7 | 5.2 | 1.2 | 27.9 | 57.6 |
| Total | 62.6 | 73.2 | 66.2 | 70.1 | 60.4 | 259.3 | 274.2 |
The gross margin for the second quarter was 78.7% (71.3).
Operating expenses for the second quarter amounted to SEK 38.3 million (42.6). The increase in marketing expenses is mainly explained by recruitments to sales, presales and customer support. Capitalization of development expenditures was SEK 13.7 million (10.1). Depreciation of capitalized development expenditures was SEK 5.5 million (11.4).
Operating earnings for the quarter amounted to SEK 11.0 million (14.5). Last year's operating earnings was affected by other operating revenue of SEK 5.0 million for exercise of options under the employee option programs.
The financial net amounted to SEK 0.1 million (1.2). The lower financial net is explained by a negative currency translation on Euro and US Dollar balances at the end of the reporting period in combination with lower interest rates on short-term investments.
profit margin at 17.7% (21.6). Quarterly revenue and net income
Net income before tax amounted to SEK 11.1 million (15.8), which corresponds to a
Revenue Net income Net income including other operating income Note1: Adjusted for other operating revenue of SEK 13.5 million, net income in Q4 2006 was SEK 3.4 million. Net income including deferred tax asset of 27.1 MSEK
Note2: Adjusted for other operating revenue of SEK 10.0 million, net income in Q4 2007 was SEK 8.3 million. Note3: Including a deferred tax asset of 27.1 MSEK
Liquid funds at the end of the period totaled SEK 138.2 million (119.0). Cash flow and financial position
Cash flow from ongoing operations for the six months period amounted to SEK –8.7 million (17.2) whereas total cash flow amounted to SEK –13.5 million (-9.3). Cash flow from ongoing operations for the second quarter amounted to SEK –20.3 million (28.9). Total cash flow for the second quarter amounted to SEK -34.5 million (13.2). The negative cash flow is mainly related to trade receivables and late order intake in the quarter, which meant late invoicing, in combination with extended payment terms for some larger projects.
Shareholders' equity amounted to SEK 313.7 million (212.1) with an equity ratio of 81.9% (73.6%).
Investments
Investments in tangible assets during the second quarter amounted to SEK 0.4 million (12.4). Depreciation of tangible assets amounted to SEK 0.3 million (1.9). Capitalized development expenditures for the second quarter, reported as intangible assets, amounted to SEK 13.7 million (10.0). Depreciation of capitalized development expenditures was SEK 5.5 million (11.5). At the end of the period, net book value of capitalized development expenditures amounted to SEK 83.6 million (68.8).
| Employees | At the end of the period Net Insight had 121 (99) employees. The parent company Net Insight AB had 115 (92) employees, of which four employees are based in Singapore. The US subsidiary Net Insight Inc. had 6 (7) employees. |
|---|---|
| Parent company | The parent company's net turnover was SEK 134.2 million (154.6). Net income amounted to SEK 14.2 million (20.3). Liquid funds amounted to SEK 136.7 million (117.0). The tax loss carry-forward is approximately SEK 894 million, which means that the |
| Risk and | potential value of the deferred tax asset is approximately SEK 235 million based on a tax rate at 26.3%. Net Insight's operation and results are impacted by a number of external and internal |
| sensitivity analysis |
factors. A continuous process identifies all existing risks and assesses how each risk shall be managed and mitigated. The risks to which the company is exposed are divided into market related risks (including competition, technology development, political risks), operational risks (including product liability, intellectual property rights, litigation, customer |
| dependence) and financial risks (including predominately currency exposure). No additional significant risks or uncertainties than those described in the annual report 2008 have developed in the six months period. However, the global economic downturn has meant that business decisions as well as customer payments are sometimes delayed. |
|
For a complete description of the Company's risk analysis and risk management, see page 27 and 37 in the 2008 Annual report.
| Q2 | Q2 | Jan-Jun | Jan-Jun | Q308-Q209 | Full Year | |
|---|---|---|---|---|---|---|
| Amount in SEK thousands | 2009 | 2008 | 2009 | 2008 | 12 months | 2008 |
| Net Sales | 62 648 | 73 196 | 123 055 | 137 940 | 259 420 | 274 305 |
| Cost of goods & services sold | -13 353 | -21 004 | -28 013 | -41 075 | -62 629 | -75 691 |
| Gross earnings | 49 295 | 52 192 | 95 042 | 96 865 | 196 791 | 198 614 |
| Marketing expenses | -21 673 | -17 667 | -38 901 | -34 138 | -71 452 | -66 689 |
| Administration expenses | -5 615 | -6 507 | -12 929 | -12 298 | -26 972 | -26 341 |
| Development expenses | -10 996 | -18 456 | -21 888 | -35 721 | -57 684 | -71 517 |
| Other operating income | 0 | 4 980 | 0 | 5 408 | -1 586 | 3 822 |
| Operating earnings | 11 012 | 14 542 | 21 324 | 20 116 | 39 097 | 37 889 |
| Net financial items | 84 | 1 241 | -196 | 1 907 | 870 | 2 973 |
| Earnings before tax | 11 096 | 15 783 | 21 128 | 22 023 | 39 967 | 40 862 |
| Tax | -3 151 | 0 | -5 987 | 0 | 21 091 | 27 078 |
| Net income | 7 945 | 15 783 | 15 141 | 22 023 | 61 058 | 67 940 |
| Net income for the period attributable to the stockholders of the | 7 945 | 15 783 | 15 141 | 22 023 | 61 058 | 67 940 |
| parent company | ||||||
| Earnings/loss per share , based on net profit attributable to the | ||||||
| Parent Company's shareholders during the period (in SEK per | ||||||
| share) | ||||||
| Earnings per share before dilution | 0,02 | 0,04 | 0,04 | 0,06 | 0,16 | 0,18 |
| Earnings per share after dilution | 0,02 | 0,04 | 0,04 | 0,06 | 0,16 | 0,18 |
| Average number of shares in thousands before dilution | 389 933 | 373 129 | 385 629 | 372 104 | 380 606 | 374 307 |
| Average number of shares in thousands after dilution | 389 933 | 382 940 | 385 629 | 381 568 | 380 606 | 379 481 |
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | ||||||
| Other comprehensive income | ||||||
| Exchange rate differences | -559 | 6 | -71 | -461 | 2 138 | 1 748 |
| Total other comprehensive income | -559 | 6 | -71 | -461 | 2 138 | 1 748 |
| Total comprehensive income for the period, net after tax | 7 386 | 15 789 | 15 070 | 21 562 | 63 196 | 69 688 |
| Total comprehensive income for the period attributable to the | 7 386 | 15 789 | 15 070 | 21 562 | 63 196 | 69 688 |
| stockholders of the parent company |
| 30 Jun 2009 | 30 Jun 2008 | Q308-Q209 | 31 dec 2008 | |
|---|---|---|---|---|
| Amount in SEK thousands | 6 months | 6 months | 12 months | 12 months |
| Ongoing operations | ||||
| Net income before tax | 21 128 | 22 023 | 39 967 | 40 862 |
| Depreciation | 11 265 | 26 522 | 38 779 | 54 036 |
| Other items not affecting liquidity | 1 805 | 4 138 | -1 183 | 1 150 |
| Cash flow from ongoing operations | ||||
| before change in working capital | 34 198 | 52 683 | 77 563 | 96 048 |
| Change in working capital | ||||
| Increase-/decrease+ in inventories | 8 914 | 3 221 | -3 932 | -9 625 |
| Increase-/decrease+ in receivables | -38 156 | -31 518 | -48 909 | -42 271 |
| Increase+/decrease- in current liabilities | -13 610 | -7 141 | 857 | 7 326 |
| Cash flow from ongoing operations | -8 654 | 17 245 | 25 579 | 51 478 |
| Investment activity | ||||
| Acquisitions of intangible fixed assets | -26 412 | -22 350 | -48 531 | -44 469 |
| Acquisitions of tangible fixed assets | -1 085 | -12 166 | 7 350 | -3 731 |
| Increase-/decrease+ in long-term receivables | 22 | -53 | -97 | -172 |
| Increase+/decrease- in long-term liabilities | -299 | 0 | -936 | -637 |
| Cash flow from investment activity | -27 774 | -34 569 | -42 214 | -49 009 |
| Financing activity | ||||
| New share issue - employee stock option program | 22 897 | 8 065 | 35 874 | 21 042 |
| Cash flow from financing activity | 22 897 | 8 065 | 35 874 | 21 042 |
| Increase/decrease in liquid funds | -13 531 | -9 259 | 19 239 | 23 511 |
| Liquid funds, opening balance | 151 744 | 128 233 | 118 974 | 128 233 |
| Liquid funds, closing balance | 138 213 | 118 974 | 138 213 | 151 744 |
| Amount in SEK thousands | Jun 30, 2009 | Jun 30, 2008 | Dec 31, 2008 |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Intangible assets | |||
| Capitalized expenditure for development | 83 560 | 68 796 | 67 864 |
| Goodwill | 4 354 | 4 354 | 4 354 |
| Tangible fixed assets | |||
| Equipment | 4 366 | 3 780 | 3 830 |
| Equipment for leasing | 0 | 12 940 | 0 |
| Financial assets | |||
| Deferred tax asset | 21 091 | 0 | 27 078 |
| Deposits paid, long-term | 337 | 240 | 359 |
| Total fixed assets | 113 708 | 90 110 | 103 485 |
| Current assets | |||
| Inventory | 21 222 | 17 290 | 30 136 |
| Customer receivables | 100 573 | 49 467 | 62 608 |
| Other receivables | 10 011 | 12 208 | 9 820 |
| Cash and bank balances | 138 213 | 118 974 | 151 744 |
| Total current assets | 270 019 | 197 939 | 254 308 |
| Total assets | 383 727 | 288 049 | 357 793 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Restricted shareholders' equity | |||
| Share capital | 15 597 | 14 984 | 15 196 |
| Other contributed capital | 1 200 259 | 1 162 468 | 1 176 497 |
| Translation difference | -801 | -2 939 | -730 |
| Accumulated deficit | -901 348 | -962 406 | -916 489 |
| Total shareholders' equity | 313 708 | 212 107 | 274 474 |
| Long term liabilities | |||
| Long-term liabilities | 1 252 | 2 188 | 1 551 |
| Provisions | 5 776 | 4 560 | 5 168 |
| Total provisions | 7 028 | 6 748 | 6 718 |
| Current liabilities | |||
| Accounts payable | 14 618 | 18 168 | 26 411 |
| Other liabilities | 48 373 | 51 026 | 50 190 |
| Total current liabilities | 62 991 | 69 194 | 76 601 |
| Total liabilities and equity | 383 727 | 288 049 | 357 793 |
| Other | Total | ||||
|---|---|---|---|---|---|
| Share | contributed | Translation | shareholders' | ||
| Amount in SEK thousands | capital | capital | difference | Net earnings | equity |
| 08-01-01 | 14 828 | 1 153 294 | -2 478 | -984 429 | 181 215 |
| Total comprehensive income | 0 | 0 | -461 | 22 023 | 21 562 |
| Non-registered share capital | 22 | 1 291 | 0 | 0 | 1 313 |
| New shares issued - employee stock options | 134 | 6 618 | 0 | 0 | 6 752 |
| Employee stock option program: | |||||
| Value of employees' services | 0 | 1 265 | 0 | 0 | 1 265 |
| 08-06-30 | 14 984 | 1 162 468 | -2 939 | -962 406 | 212 107 |
| Total comprehensive income | 0 | 0 | 2 209 | 45 917 | 48 126 |
| Non-registered share capital | -22 | -1 291 | 0 | 0 | -1 313 |
| New shares issued - employee stock options | 234 | 14 056 | 0 | 0 | 14 290 |
| Employee stock option program: | |||||
| Value of employees' services | 0 | 1 264 | 0 | 0 | 1 264 |
| 08-12-31 | 15 196 | 1 176 497 | -730 | -916 489 | 274 474 |
| 09-01-01 | 15 196 | 1 176 497 | -730 | -916 489 | 274 474 |
| Total comprehensive income | 0 | 0 | -71 | 15 141 | 15 070 |
| New shares issued - employee stock options | 402 | 22 495 | 0 | 0 | 22 897 |
| Employee stock option program: | |||||
| Value of employees' services | 0 | 1 267 | 0 | 0 | 1 267 |
| 09-06-30 | 15 597 | 1 200 259 | -801 | -901 348 | 313 708 |
| Consolidated condensed income | |||||
|---|---|---|---|---|---|
| statement and key figures, SEK m | Q2 2009 | Q2 2008 | Q3 2008 | Q4 2008 | Q1 2009 |
| Net sales | 62.6 | 73.2 | 66.2 | 70.2 | 60.4 |
| Gross earnings | 49.3 | 52.2 | 49.5 | 52.4 | 45.7 |
| Gross margin | 78.7% | 71.3% | 74.8% | 74.7% | 75.7% |
| Operating earnings | 11.0 | 14.5 | 8.6 | 9.8 | 10.3 |
| Operating margin | 17.6% | 19.9% | 13.0% | 14.0% | 17.1% |
| Pretax profit | 11.1 | 15.8 | 9.1 | 10.4 | 10.0 |
| Net income | 7.9 | 15.8 | 9.1 | 37.5 | 7.2 |
| Net margin | 12.7% | 21.6% | 13.7% | 53.5% | 11.9% |
| Q2 | Q2 | Jan-Jun | Jan-Jun | Q208-Q109 | Full Year | |
|---|---|---|---|---|---|---|
| Amount in SEK thousands | 2009 | 2008 | 2009 | 2008 | 12 months | 2008 |
| Net Sales | 68 247 | 81 779 | 134 210 | 154 629 | 287 293 | 307 712 |
| Cost of goods & services sold | -19 797 | -27 391 | -40 100 | -53 798 | -85 846 | -99 544 |
| Gross earnings | 48 450 | 54 388 | 94 110 | 100 831 | 201 446 | 208 167 |
| Marketing expenses | -21 773 | -17 763 | -39 098 | -34 396 | -71 837 | -67 135 |
| Administration expenses | -5 409 | -6 507 | -12 723 | -12 298 | -27 856 | -27 431 |
| Development expenses | -10 996 | -18 456 | -21 888 | -35 721 | -58 826 | -72 659 |
| Operating earnings | 10 272 | 11 662 | 20 401 | 18 416 | 42 928 | 40 943 |
| Net financial items | 84 | 1 236 | -196 | 1 893 | -8 694 | -6 605 |
| Earnings before tax | 10 356 | 12 898 | 20 205 | 20 309 | 34 233 | 34 337 |
| Tax | -3 151 | 0 | -5 987 | 0 | 23 927 | 27 078 |
| Net income | 7 205 | 12 898 | 14 218 | 20 309 | 55 324 | 61 415 |
| Amount in SEK thousands | Jun 30, 2009 | Jun 30, 2008 | Dec 31, 2008 |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Intangible assets | |||
| Capitalized expenditures for development | 83 560 | 68 796 | 67 864 |
| Tangible fixed assets | |||
| Equipment | 4 366 | 3 780 | 3 830 |
| Equipment for leasing | 0 | 12 940 | 0 |
| Financial assets | |||
| Shares in group companies | 18 398 | 3 387 | 18 398 |
| Deferred tax asset | 21 091 | 0 | 27 078 |
| Deposits paid, long-term | 337 | 240 | 359 |
| Total fixed assets | 127 752 | 89 143 | 117 529 |
| Current assets | |||
| Inventory | 21 222 | 17 290 | 30 136 |
| Customer receivables | 100 573 | 49 467 | 62 608 |
| Other receivables | 24 322 | 11 845 | 9 706 |
| Receivable other group companies | 0 | 11 645 | 0 |
| Cash and bank balances | 136 655 | 116 988 | 149 880 |
| Total current assets | 282 772 | 207 235 | 252 330 |
| TOTAL ASSETS | 410 524 | 296 378 | 369 859 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Restricted shareholders' equity | |||
| Share capital | 15 597 | 14 984 | 15 196 |
| Other contributed capital | 171 652 | 166 193 | 180 224 |
| Group contribution | 8 812 | 2 092 | 8 812 |
| Non-restricted equity/Accumulated deficit | 107 967 | 20 310 | 61 415 |
| Total shareholders' equity | 304 028 | 203 579 | 265 646 |
| Long term liabilities | |||
| Long term liabilities | 1 252 | 2 188 | 1 551 |
| Guarantee provisions | 5 776 | 4 560 | 5 168 |
| Total long-term liabilities and provisions | 7 028 | 6 748 | 6 719 |
| Current liabilities | |||
| Accounts payable | 14 583 | 18 168 | 26 411 |
| Liabilities, subsidaries | 38 736 | 18 572 | 22 513 |
| Other liabilities | 46 149 | 49 311 | 48 571 |
| Total liabilities | 99 468 | 86 051 | 97 495 |
| TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY | 410 524 | 296 378 | 369 859 |
This interim report has been prepared in accordance with International Financial Reporting Standards (IFRS) and the structure follows IAS 34 Interim Financial Reporting. Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2008, as described in those annual financial statements. The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 January 2009.
IAS 1 (revised), Presentation of financial statements. The revised standard prohibits the presentation of items of income and expenses (that is 'non-owner changes in equity') in the statement of changes in equity, requiring 'non-owner changes in equity' to be presented separately from owner changes in equity. All 'non-owner changes in equity' are required to be shown in a performance statement. Entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income). The group has elected to present an income statement and a statement of comprehensive income.
IFRS 8, Operating segments. IFRS 8 replaces IAS 14, 'Segment reporting'. It requires a 'management approach' under which segment information is presented on the same basis as that used for internal reporting purposes. This has resulted in that the following segments are presented in the financial statement, EMEA, North America and APAC. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Chief Executive Officer that makes strategic decisions.
IAS 23, Borrowing costs. The revised standard requires that borrowing costs related to construction of qualifying assets have to be capitalized as part of the cost of acquisition. Currently the company has no borrowings why the implementation of the standard currently has no practical effect.
The other standards, amendments to standards and interpretations that are mandatory for the first time for the financial year beginning 1 January 2009, are not currently relevant for the group.
The company's auditors have not examined this report.
Certification by the Board of Directors and the CEO The Board of Directors and the CEO certify that the six-month report provides a true and fair picture of the income statement, the balance sheet and the cash flow statement and the explaining notes gives a true and fair view of the company's position and results, and that it describes the significant risks and uncertainties impacting the operation and the results.
Reporting dates
Interim report for January – September 2009: 22 October 2009 Year-end report 2010: 19 February 2010
Stockholm, 28 August 2009
Lars Berg Bernt Magnusson Chairman of the Board Board member
Gunilla Fransson Arne Wessberg Board member Board member
Fredrik Trägårdh Chief Executive Officer
For more information, please contact: Fredrik Trägårdh, CEO Net Insight AB Tel.: +46 (0) 8-685 04 00, email: [email protected]
Net Insight AB (Corporate Reg. No. 556533-4397) Box 42093, 126 14 Stockholm, Tel +46 (0) 8 685 04 00, www.netinsight.net
Ragnar Bäck Clifford H Friedman Board member Board member
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